"The genie is out of the bottle," said Rob Kennelly, agent-TV packaging for Creative Artists Agency, during the Advertising Age Madison + Vine conference panel on ROI/Accountability. "We should be able to figure out how to bring brands closer together."
But Jamie Kellner, chairman-CEO of Turner Broadcasting System, said PVRs are destructive to the TV business, contribute to lower ratings, lower advertising revenue and fewer quality programs for TV distributors. He criticized Mr. Kennelly for buying into the notion that branded entertainment will be the savior of the TV business. "I think you are drinking the Kool-Aid."
"What drives our business is people selling light bulbs and vacuum cleaners in Salt Lake City," said Mr. Kellner. "If you take even a small percentage away, you are going to push this business under profitablity."
Brodie Keast, senior VP-general manager, TiVo, said 60% to 70% of people watching TiVo-recorded programming are skipping commercials. But, he said, TiVo isn't just about skipping ads. "It's the byproduct of how people change their viewing habits. It's the idea that you're never going to miss your favorite show, and that you'll try new shows."
Bruce Redditt, exec VP, Omnicom Group, said many branded-entertainment projects proposed as a remedy to PVRs are limited to the largest U.S. marketers who can afford the commercials. "How do you sell a mattress factory or Tidy Bowl?" asked Mr. Redditt.
Another issue is the inability to accurately measure the effectiveness of branded-content deals. "It's a CPM at a premium," said Mr. Redditt. Later, he said "accountability is something Hollywood has a hard time with."
From the audience, David Lubars, president-executive creative director for Publicis Groupe's Fallon North America, creator of BMW's Internet Films, suggested that viewers still see commercials when fast-forwarding, and that there is value there. Mr. Kellner then addressed Michael Browner, executive director-media and marketing operations at the nation's largest advertiser, General Motors Corp., who was in the audience: "We'll have to fast-forward your commercials double time." Countered Mr. Browner, "Then we'll simply cut the check half-time."
But it was clear that those crafting the next wave are learning to ride some rough currents.
In another panel, "Where Do You Draw the Line?" one of this TV season's failures, ABC's offbeat drama, "Push, Nevada," was discussed. Sprint PCS and Toyota Motor Sales USA were major marketing partners in the project, which included product placement.
"If it had taken off, it may have been like BMW Films," said Steve Sturm, VP-general manager of Toyota. Part of the problem, said Mr. Sturm, was that Toyota was promised high-profile guest stars to appear in the drama, produced by Ben Affleck and Matt Damon's Live Planet Productions. "The stars were low-list [talent]," he said.
TV networks have their own headaches with product-integration deals, especially when it comes to the success rate of new shows. "You have accept that most of it fails," said Jordan Levin, president of entertainment for AOL Time Warner's WB. "Ultimately, you are betting with your gut."
There's also no guarantee of total success. "If there is one grand slam over the seven-year relationship, then everyone is happy," said Lori Sale, exec VP-worldwide promotion for Miramax Films, which inked a multiyear promotional deal with Coors Brewing Co., including having the beer's logo displayed at major Miramax film openings. As part of the deal, its filmmakers don't have to use Coors when beer is shown; but if they don't, they need to use a fictional brand.